Question

List and briefly discuss three of the siz value creating (growth) stategies implemented by firms purchasing a Single Business (Concentration) corportate-level stragety?  

b) Give an example of each. (Be specific)

Answer 1

Three of the six value creating (growth) strategies implemented by firms are -

1> Market Penetration - It is an important market growth strategy for mainly small companies. Small companies use this strategy to choose the market for the products which have been already used in that market. In this case, the only way to do more selling of the products is increasing market share. Market share is the percent of unit and dollar sales which is important for a company to compete with others in the same market.

Example - In a market where every company's product has small differences only, a lower price may help a company to increase their market share.

2> Market Expansion - This is another important strategy for big companies. According to this strategy, companies are searching for a new market for their products. The main reason for the market expansion is getting no room in the current market as there are very much competitions for the same product. So a company always try to find new markets for their products to increase sales or profits.

Example - A small soap distributor who sells soap to retail stores can find that factory workers also use his/her soaps.

3> Product Expansion - This strategy is used by many companies to be more competitive in the same market. Many companies are integrating more features into the same product to make more attractive to customers and this is called product development strategy also.

Example - Many mobile or car companies always add more features to their same product to attract more customers than others in the same market.

These growth strategies are implemented by firms to purchase a Single Business (Concentration) corporate-level strategy.